Banks in Romania continue cleaning bad loans in 2015

Banks in Romania will continue getting rid of non-performing loans next year, a process started in 2014, but the results of this cleanup process will not be seen in the near future, according to the credit ratings agency Fitch, reports local Mediafax. The immediate effects of bad debt clean up include an increased costs for the bank shareholders and a greater volatility in the financial dynamics for lending institutions. Cleaning bank portfolios should lead on the longer term to strengthening credit profiles, shows a Fitch analysis on the ratings given to banks in Central and Eastern Europe (CEE). The agency estimates that the prospect ratings for the CEE banking system will remain stable in 2015, despite the worsening outlook for a number of individual institutions this year. editor@romania-insider.com